Malaysia's UMW-OG Cancels Plan To Buy Icon Offshore

Malaysia's UMW-OG Cancels Plan To Buy Icon Offshore

Malaysia's offshore drilling services firm UMW Oil & Gas Corp. Bhd (UMW-OG)
scrapped plans on May 4 to acquire offshore support vessel provider Icon
Offshore Bhd, citing capital constraints and uncertainties in the industry.

UMW-OG said in January it planned to buy Icon in a deal valuing the target
at 588.6 million ringgit (US$136.06 million).

It had also said it planned to buy 95.5% of Orkim Sdn Bhd, an operator of
clean petroleum product transport vessels, which it then valued at 495
million ringgit.

But UMW-OG said it was terminating the deal "after considering the
significant capital requirements of UMW-OG and upon taking into account the
need to have greater clarity on the industry consolidation framework and
certainty of the industry environment before any such consolidation can be
pursued."

The firm said in a statement it would explore opportunities to collaborate
in the future, because it believes the creation of a major integrated oil
and gas service provider was the right strategic approach for the
longer-term.

UMW-OG said it would now pursue a plan to recapitalize.

In 2016, analysts raised concerns about UMW-OG's high-gearing levels. The
company has since restructured a large portion of its short-term debt into
long-term debt and has received a 308 million ringgit cash injection from
its parent.

Malaysia's energy sector, and the industry worldwide, has been hit by a
slide in oil prices.

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Link to Original Article:
http://www.epmag.com/malaysias-umw-og-cancels-plan-buy-icon-offshore-1555511
#p=full

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com